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Revamped charity poker rules go to state panel, could be law in May

New proposed rules for charity poker games could take effect as early as May if the state's Joint Committee on Administrative Rules doesn't oppose them.

Among other things, the rules would place new limits on the amount of money that permanent poker rooms and licensed suppliers can make from the games — and limit the number of games that can take place concurrently at a single location. The rules would also require charities to show they've done other types of fundraising beyond the poker parties as an indication of their legitimacy.

Rick Kalm, executive director of the Michigan Gaming Control Board, resubmitted the rules to the committee March 25. That was just days after he'd withdrawn an earlier set of proposed rules to address concerns by the committee based on feedback from more than 50 representatives of charities, millionaire party suppliers and permanent poker rooms who attended a March hearing.

The resubmitted rules allow up to two millionaire parties per location per day, rather than one as earlier proposed, and increase the amount charities can pay licensed suppliers for expenses to up to 45 percent of the event gross profits, rather than the earlier 35 percent proposed.

Rick Kalm, Michigan Gaming Control Board

The new plan also eliminates a rule that would have only allowed charities to conduct the games at a site in their county or an adjacent county.

"This was a compromise as suggested by some members" of the joint committee, Kalm said in an email.

"Our intent has been to favor the charities and ensure we have a viable licensed supplier pool."

Other significant changes proposed under the new rules:

No more than four millionaire parties per week are allowed at any one location.

Three representatives from the benefiting charity must be present at games, rather than the two now required.

Charities must have raised $500 outside of the poker games during the preceding year in order to apply for each millionaire party license.

Background checks on all dealers must be performed by state Gaming Control Board staff.

The committee has until the end of April to file a notice of objection to the rules if it disagrees with them. It would then be required to introduce a bill to remove the rulemaking authority from the Gaming Control Board, delay the rules from being filed for a year and/or rescind the rules once the Gaming Control Board files them to give the Legislature time to act, committee counsel and clerk Marge Martin said.

Kalm said poker rooms will no longer be able to rent equipment, run games or take 50 percent of the proceeds from the games, as they had been allowed to under oversight by the Michigan Lottery Bureau.

The rules allow only licensed suppliers to assist with games, he said. Locations will only be allowed to charge the charity a rental fee of up to $250 for the space.

The new charity poker rules will go into effect if the committee doesn't object to them, but that may not be the end to the issue.

In March, Sen. Rick Jones, R-Grand Ledge, introduced SB 878 to amend the Traxler-McCauley-Law-Bowman Bingo Act, with 11 senators from both parties as co-sponsors. The bill is currently before the Committee on Regulatory Reform.

Among other things, the bill would legitimize permanent charity poker rooms in Michigan and allow them to supply gaming equipment for the games.

It would also provide a licensing code for dealers and suppliers that assist charities in running the games and establish checks to ensure charities are legitimate, Jones said last month.

A separate provision in the bill would treat racetracks differently than other gaming venues, allowing for up to seven charity poker games at a track (compared with up to six games concurrently at other locations).

While charities already could host millionaire parties currently at racetracks, the provision in the bill green-lights racinos, which haven't been approved by state legislators.